Higher Level Of Financial Literacy Research Articles

Shedding light on the impact of financial literacy for corporate social responsibility during the COVID-19 crisis: managerial and financial perspectives

PurposeThe aim of this paper is to help management scholars and executives learn from the COVID-19 global crisis by analyzing if and how the level of financial literacy affected stakeholders' sensitivity to corporate social responsibility (CSR) issues during the pandemic, as well as identifying whether financial literacy is an important variable to account for in the postpandemic period. The authors test the relationship between objective (measurable) and subjective (self-assessed) financial literacy, as well as financial happiness (i.e. satisfaction with one's current financial situation) with CSR during the pandemic. High levels of financial literacy cause individuals to reward companies that implement CSR strategies and processes.Design/methodology/approachThe authors designed an online survey and obtained data on objective and subjective financial literacy, financial happiness and COVID-19 infections, as well as on the demographic and socioeconomic characteristics of a representative sample of 1,334 Italian respondents. From a methodological point of view, the authors perform a factor analysis on the CSR-related questions to extract the principal components (PCs) that were used as dependent variables in the regression models to analyze the effects of explanatory variables (financial literacy, financial happiness and COVID-19 infections) and consider the control variables (demographic and socioeconomic characteristics). The authors follow a theoretical approach merging stakeholder theory with CSR.FindingsRespondents with a high level of financial literacy and financial happiness are highly sensitive to all CSR components (ethical, philanthropic, economic and legal social responsibilities). Being infected by COVID-19 increased participants' sensitivity to ethical and philanthropic social responsibility (SR), but not to economic and legal SR. The more educated and employed respondents were, the more sensitive they were to CSR, especially compared to their less educated and unemployed counterparts.Research limitations/implicationsWhile the sample used is large and representative of the Italian population, Italy is an interesting and useful case to analyze, given that it was the first Western country to be severely hit by COVID-19; since the paper only refers to a specific country scenario, the results cannot be generalized to other countries. A cross-country comparison relating financial literacy and financial happiness to CSR during the COVID-19 pandemic period would be desirable. The research study has theoretical implications for management scholars since the authors show that, during the pandemic period, financial education and financial happiness are relevant in explaining stakeholders' greater sensitivity to CSR issues. The findings may thus help scholars to learn from the COVID-19 period, with the aim of further developing and enhancing stakeholders' theory.Practical implicationsThe research also has practical implications, both for corporate executives and for policymakers, helping them to learn from the COVID-19 global crisis concerning the role of financial literacy and financial happiness on CSR sensitivity and, consequently, how they may consider these important variables in the postpandemic era. On the one hand, executives may improve stakeholders' segmentation and eventually modify CSR policies, considering the higher sensitivity of their stakeholders' due to a higher degree of financial literacy. On the other hand, the findings suggest that policymakers should have a stronger role in supporting employment and education in general and in promoting programs to improve financial literacy to increase stakeholders' sensitivity to CSR, thus further stimulating the inclusion of CSR factors in companies' strategies. Increasing stakeholders' sensitivity to CSR will, in turn, increase the propensity of companies to include SR in their strategies. Thus, increasing financial literacy will have tangible positive effects of increasing CSR. Given the greater role played by companies during the COVID-19 period with respect to societal risk, the findings seem particularly useful.Originality/valueTo the best of the authors’ knowledge, this study represents the first that links financial literacy and financial happiness with CSR during the COVID-19 crisis. The large and representative dataset, as well as the use of specific variables related to financial literacy, financial happiness and COVID-19 infections in the CSR assessment model, makes our analysis original, robust and significant by contributing to the CSR literature and to the financial literacy literature from a methodological point of view, as well as by informing corporate executives and policymakers about the role of financial literacy with regard to CSR during the pandemic, which may help them in learning how to improve their decisions and actions in the postpandemic era.

Financial Literacy and Financial Risk Tolerance of Lottery Gamblers in Thailand

This paper investigates the impacts of financial literacy level, financial risk tolerance and demographic characteristics on gambling behavior of informal laborers. The data were analyzed by Multivariate Analysis of Variance and Multinomial Logistic Regression. The total of 995 participants used in this research were collected by Multi-Stage Randomization from the informal laborers in Southern Thailand. The empirical analysis revealed that the financial literacy confidence, the risk tolerance, and the demographic characteristics were significant determinants of the gambler’s behavior. The older the gamblers were, the more they got addicted to gambling. Also, the more the people perceived that they have a high level of financial literacy, the more they would gamble. However, it was found that the female laborers were more frequent gamblers than the males. Thus, agencies responsible for supervising the financial education should be aware of the expected outcomes, not only focusing on actual financial literacy, but also supporting the individuals to achieve a healthy level of financial literacy confidence.

Optimal Distinctiveness: Revisited Theory and Tests on Entrepreneurial Finance Markets

Optimal distinctiveness describes a core paradox at the interface of institutional theory and strategic management: how do firms keep the balance between conforming with and being distinctive from their organizational peers? Empirical research finds inconsistent results of the position of optimal distinctiveness in different contexts. Building on the perspective of legitimacy, this paper proposes that highly distinctive firms may be perceived as morally and pragmatically legitimate in financial markets in which funders are novelty-expecting and capable of selecting high-quality firms. Thus, highly differentiated firms are legitimate in private equity and crowdfunding markets, making high distinctiveness optimal. This proposition is supported by the evidence that highly distinctive firms tend to fundraise in private equity and crowdfunding markets. Furthermore, the inclination to adopt crowdfunding is stronger if crowdfunders have a higher level of financial literacy.

Ограниченная рациональность принятия решений пользователями онлайн-сервисов микрофинансовых организаций

Microfinance is very popular in Russia, but this sphere is often associated with a number of socioeconomic problems, one of which is the population’s debt load. Often the clients of microfinance organizations (MFOs) are citizens from the poorest segments of the population who do not have a high level of financial literacy. The trend towards digitalization of the financial sector has a significant impact on the decision-making process of MFO services consumers. The subject of this paper is the problem of bounded rationality of decision-making, typical for users of online services of microfinance organizations. To reduce the negative effects on users of MFO services, the Central Bank reduces the maximum permissible interest rate for this type of organizations, and the Ministry of Finance organizes programs to improve financial literacy. The aim of the study is to estimate the efficiency of existing methods for solving this problem and to propose our own solution based on the concepts of behavioral imperialism. The relevance is that the digitalization of the financial sector is rapidly increasing, since both classic services are moving online and completely new technological financial services (fintech) appear, which requires the user to master new skills of working in the online environment. In conclusion, the author gives his recommendations for financial literacy programs that can reduce the bounded rationality of financial decision-making.

Association of Health Insurance Literacy With Financial Hardship in Patients With Cancer

Patient-reported financial hardship is an increasing challenge in cancer care delivery. Health insurance literacy and its association with financial hardship in patients with cancer, especially after controlling for financial literacy, have not been well examined. To examine the prevalence of and factors in the association between health insurance literacy and financial literacy as well as the overall and individual domains of financial hardship and their association with health insurance literacy, both independently and when adjusted for financial literacy, in patients with cancer. This cross-sectional survey study recruited and enrolled patients from 2 separate ambulatory infusion centers at Mayo Clinic Arizona in Phoenix, Arizona, and the University of Mississippi Medical Center in Jackson, Mississippi. Adult patients aged 18 years or older were enrolled from December 2019 to February 2020 and from August to October 2020 at Mayo Clinic Arizona (n = 299) and from September 2020 through January 2021 at the University of Mississippi Medical Center (n = 105). Survey respondents received a $5 gift card. Surveys included questions about sociodemographic characteristics, health insurance literacy and financial literacy, financial knowledge, and financial hardship and its domains (material hardship, psychological hardship, and behavioral hardship). Financial hardship was assessed using the COST-FACIT (Comprehensive Score for Financial Toxicity-Functional Assessment of Chronic Illness Therapy) measure and National Health Interview Survey questions to capture information about the domains of financial hardship. The Health Insurance Literacy Measure is a validated 21-item measure of a consumer's ability to select and use health insurance. Five questions from the National Financial Capability Study assessed financial literacy. A total of 404 participants were enrolled in the study. Median (IQR) age of the respondents was 63 (54-71) years, and 219 were women (54%), 307 were non-Hispanic White individuals (76%), 153 (38%) had private insurance, and 289 (72%) had solid tumors. Overall financial hardship (denoted by median COST-FACIT score <27 points) was reported by 49% (95% CI, 44%-53%) of the cohort. Prevalence of financial hardship was higher using the National Health Interview Survey questions, with 68% (95% CI, 63%-72%) of respondents reporting at least 1 hardship domain (n = 276). Sixty-six percent (95% CI, 60%-69%) of respondents (n = 265) had a high level of financial literacy. The mean (SD) Health Insurance Literacy Measure score was 64.9 (13.3) points. In multivariable analyses, each 10-point increase in the Health Insurance Literacy Measure score was associated with lower odds of financial hardship (odds ratio, 0.82; 95% CI, 0.68-0.99; P = .04). However, this association was no longer significant after adjusting for financial literacy. Results of this study showed that, despite a high level of health insurance literacy and financial literacy, the prevalence of financial hardship was high. Although there were lower odds of financial hardship with increased health insurance literacy, the association was no longer significant when financial literacy was added to the model, suggesting that a high level of financial literacy may help mitigate the adverse outcome of lower health insurance literacy levels in patients with cancer.

Household financial literacy and relative poverty: An analysis of the psychology of poverty and market participation.

Financial literacy is the significant human capital factor affecting people's ability to obtain financial services. Evaluating the relationship between financial literacy and relative poverty is of great significance to poverty reduction. This study investigated the impacts of financial literacy on relative poverty from the perspective of poverty psychology and market participation using data from the 2017, 2019 China Household Finance Survey (CHFS). The empirical findings showed that financial literacy can alleviate relative household poverty through household participation in entrepreneurial activities, commercial insurance participation and the choice of lending channels. Financial literacy has significant poverty reduction effect on households of continuous operation, reduces the likelihood of exiting operation. Further discussion showed that the poverty reduction effect of financial literacy is more pronounced among households with higher levels of financial literacy, under the age of sixty, low levels of indebtedness and in the eastern region. Our study provides empirical evidence for encouraging market participation and promoting financial literacy and provide valuable recommendations for the policymaker to improve poverty reduction effect in the developing country context.

Determinants Of Capital Market Investment Interest In The Millenial Generation In The Covid-19 Pandemic

The increase in investment interest during the COVID-19 pandemic is influenced by various factors. This study aims to show the factors that can influence investment interest in the capital market in the millennial generation during the covid-19 pandemic. The data analysis technique used is multiple linear regression with SPSS application. The results showed: motivation, technological progress, investment returns, investment risk, and social media had a significant positive effect and financial literacy and minimum investment capital had a significant negative effect on investment interest. Application/Originality/Value: This study examines more independent variables than previous studies and this study finds that financial literacy actually has the opposite effect on investment interest during the COVID-19 pandemic. This is in line with the existing phenomenon that the high interest in investing in the millennial generation during the COVID-19 pandemic is not matched by a high level of financial literacy.&#x0D; &#x0D; Keywords: Motivation, Technological Advancement, Financial Literacy, Minimum Investment Capital, Investment Return, Investment Risk, Social Media, Investment Interest, Millennial Generation.

COMPANY TIPS IN FACING CRISIS IN THE TIME OF THE COVID-19 PANDEMIC

The increase in investment interest during the COVID-19 pandemic is influenced by various factors. This study aims to show the factors that can influence investment interest in the capital market in the millennial generation during the covid-19 pandemic. The data analysis technique used is multiple linear regression with SPSS application. The results showed: motivation, technological progress, investment returns, investment risk, and social media had a significant positive effect and financial literacy and minimum investment capital had a significant negative effect on investment interest. Application/Originality/Value: This study examines more independent variables than previous studies and this study finds that financial literacy actually has the opposite effect on investment interest during the COVID-19 pandemic. This is in line with the existing phenomenon that the high interest in investing in the millennial generation during the COVID-19 pandemic is not matched by a high level of financial literacy.&#x0D; Keywords: Motivation, Technological Advancement, Financial Literacy, Minimum Investment Capital, Investment Return, Investment Risk, Social Media, Investment Interest, Millennial Generation.

Financial Literacy As An Effort To Sustain Small And Medium Enterprises In Denpasar

Financial literacy is an individual's knowledge of finance and an individual's ability to make effective financial decisions in terms of financial management, selection of funding sources and choosing where to allocate funds for investment. The resilience of Micro, Small and Medium Enterprises to the crisis makes Micro, Small and Medium Enterprises an important asset for the sustainability of a country's economy. This study aims to analyze the level of financial literacy in micro, small and medium enterprises in Denpasar City Micro, Small and Medium Enterprises through five main variables, namely financial knowledge, financial ability, financial behavior, financial attitudes and financial performance. The method used in this research is descriptive quantitative using data obtained from the Denpasar City Cooperative Service. The results showed that the level of financial literacy in the Micro, Small and Medium Enterprises of Denpasar City, Micro, Small and Medium Enterprises of Denpasar City was in medium criteria. A high level of financial literacy will potentially provide a higher productivity value in business sustainability.

The Entrepreneur and His Small Business: Is Financial Literacy Important?

The most appropriate survival strategy for small businesses is to pursue the growth objective. Our study seeks to investigate the presence or otherwise of a relationship between financial literacy and small business growth. Our findings reveal that entrepreneurs with a high level of financial literacy are more likely to succeed at growing their businesses when compared to entrepreneurs with a lower level of financial literacy. Hence, financial knowledge, financial behaviour and financial attitude are important assets for growing small businesses. We recommend a concentration of efforts on the human capital development of entrepreneurs to ensure the survival and growth of small businesses in Nigeria.

Типологія чинників формування моделей кредитно-інвестиційної політики в національній економіці

The article considers the approaches to defining the concept of «credit and investment policy» and the factors influencing the formation of models of credit and investment policy in the national economy. The authors typologize all factors of influence in five groups: institutional, economic, sociopsychological, infrastructural and technological. The authors propose to include the following factors to the technological group: the share of non-cash transactions, the number of broadband Internet users and the level of use of information and communication technologies. It is also suggested to add to the existing factors the following: level of financial literacy and technical education of the population, existence of state and regional investment funds, open accreditation of investment advisers, penalties for violation of investment or lending conditions, regulation of investment funds and credit unions, public confidence in state bodies, the presence of active business angels, access to credit resources, investor protection, venture capital, the amount of savings in the population. It is worth noting that the level of financial literacy has a significant impact due to the fact that the population with a higher level of financial literacy will invest more in their own savings, which will lead to an increase in private investment in Ukraine. Developed countries have long introduced educational financial and investment programs to improve financial knowledge, thereby encouraging people to save more and, as a result, to invest. Another important aspect is the development of financial literacy in the younger generation, because, according to the Organization for Economic Cooperation and Development, the purchasing power of young people (up to 25 years) is growing every year. It is concluded that the process of developing models of credit and investment policy and methods of evaluating their effectiveness need further research. Particular attention should be paid to the development of practical tools and methods for developing the credit and investment potential of the state.

Behavior of Financial Management in Coastal Communities: A Case Study of West-South Aceh Millennials

This study aims to analyze the role of attitudes, socialization, experience, and financial literacy in improving financial management behavior in the millennial generation in the south-west coast of Aceh. Lack of knowledge about financial management and lack of awareness of the need to delay consumption (investment) make Indonesian people have financial behaviors that are not ideal. The tendency toward a consumptive lifestyle of the Indonesian people demands a fairly high income. Environmental influences require the community to work as hard as possible in order to meet all needs. This study will use path analysis, which is the development of regression analysis. Based on results and discussion, we can conclude that financial attitude has a strong influence on financial behavior, even though financial literacy is also important. Because it is believed that attitude is more important than knowledge in affecting someone’s behavior in managing money, this research suggests that financial socialization has no impact on financial literacy or behavior. Lastly, when there is a high level of financial literacy, financial experience will have a greater impact on the management funds.

Financial status and literacy among residents and medical students

There is a wide perception of physicians as having minimal financial literacy, and this assumption is perpetuated through the community as the "Dumb Doctor" persona relating to financial management. This study examined medical student and resident financial behaviors and assessed their level of financial literacy using previously validated questions within the survey tool. Two surveys were distributed to medical students and residents, 1 survey each, who are part of a single medical education system. After the initial email request, 2 additional email requests were sent at 2 and 6 weeks. Using the validated questions, "The Big 3" and "The Big 5," the level of financial literacy was assessed. Of the 461 possible respondents, 261 trainees responded with 65 residents and 196 medical students, for a response rate of 57%. Financial literacy was demonstrated to be higher than the average adult with 60% answering all 3 of "Big 3" correctly, compared to national average of 30%. Investment-based questions were the most difficult with 16% correct for bond price activity and 70% for stock risk. There is high level of interest with 93% open to education on financial topics. This study showed that this cohort of medical trainees demonstrated better financial habits and a very high level of financial literacy compared to the general population. There are areas surrounding investment principles that provide an opportunity to improve their financial literacy and would likely be well received based on the high level of interest for more education.

Can personality traits influence Brazilian university students' financial literacy?

PurposeThe objective of the present study is to assess the financial literacy levels of students at a Brazilian university and investigate how these levels are affected by profile characteristics and personality traits.Design/methodology/approachData were collected using SurveyMonkey, and a link to the questionnaire was sent by e-mail. The questionnaire contains three blocks of questions: demographics, financial literacy and personality traits. Ordered logistic regression was applied to a sample of 1,312 students.FindingsYounger participants, those with higher incomes and men were more likely to have a high level of financial literacy. The same was true of those who were less extrovert, i.e. assertive, sociable, optimistic and communicative students. These results contribute to the field by indicating which population segments should be prioritized in efforts to promote financial literacy.Originality/valueTo the best of our knowledge, no study has compared Financial Literacy and Personality Traits in Brazil, a developing country that is only beginning to develop national financial literacy strategies.

Preferences, Financial Literacy, and Economic Development

Using data from 74 countries, we uncover important differences in the association between financial literacy and preferences by the level of economic development. We find that patience is only salient in wealthier countries, i.e. countries with their GDP per capita above the sample median. In such cases, countries with higher level of patience display higher levels of financial literacy. Importantly, this association is not driven by a multitude of institutional or cultural factors known to be related to financial literacy. In impoverished countries, we document a higher level of financial literacy in countries with higher levels of risk-taking but with lower levels of trust, positive reciprocity, and altruism. Countries' legal origin drives most of the association with risk-taking and about two fifths of the relationship with trust and positive reciprocity. At the same time, the country's religious composition drives the association between altruism and financial knowledge. Our findings underscore that financial education programs need to be tailored to the cultural aspect of group preferences and suggest what type of traits policies and programs ought to be reinforced in poorer countries.

Teachers’ Financial Literacy

The aim of the research is to explore the financial knowledge, attitudes, confidence, behaviour and motivations of teachers (N=752) teaching different subjects. The survey is particularly important because their knowledge, attitudes, and behaviours affect the financial awareness of the students they teach. The results indicate a higher level of financial literacy than assumed, revealing that teachers have a higher level of financial literacy than students in higher education. 86% of those surveyed have savings in addition to bank deposits, such as government bonds and other, more complex forms of savings, indicating a high level of financial awareness and inclusion. Teachers highly value their own financial literacy, and similar to those studying in higher education, are risk averse. Their vast majority consider the development of financial literacy in schools important. Financial literacy trainings have a measurably positive effect on the level of knowledge of the participants. Based on the results of the research, it is worthwhile to shape the curricula and the requirements based on the financial awareness and motivation of the teachers.

Financial Literacy, Perspectives, and Practices of Public Secondary Teachers in Urban Municipalities of Nueva Vizcaya

Financial literacy is one of the biggest problems facing government employees, especially teachers. Based on the Salary Standardization Law 1, public teachers have better compensation than any other government employees, considering their basic salary and all of the benefits. However, teachers were financially challenged in understanding and managing their own finances. Therefore, the study focused on the level of financial literacy, financial perspectives, and financial practices of the public junior high school teachers who are permanent for at least two years in their respective schools in the urban municipalities (Bayombong, Bambang, and Solano) of Nueva Vizcaya. Moreover, the concept of the study was drawn from the theories of Maslow’s Hierarchy of Needs, areas of personal finance, financial literacy identifiers and core competencies, top-down processing theory, and behavioral finance. In addition, the study used a descriptive-inferential research design, and data were analyzed using several statistical tools. The result of the study showed that public secondary teachers have a high level of financial literacy and financial perspectives. But this is in contrast to the level of financial practices, which yield a low result. Based on the result of the study, the researchers recommend a personal finance model for improving the level of financial literacy and the perspectives and practices of public secondary teachers.

Financial Literacy, Perspectives, and Practices of Public Secondary Teachers in Urban Municipalities of Nueva Vizcaya

Financial literacy is one of the biggest problems facing government employees, especially teachers. Based on the Salary Standardization Law 1, public teachers have better compensation than any other government employees, considering their basic salary and all of the benefits. However, teachers were financially challenged in understanding and managing their own finances. Therefore, the study focused on the level of financial literacy, financial perspectives, and financial practices of the public junior high school teachers who are permanent for at least two years in their respective schools in the urban municipalities (Bayombong, Bambang, and Solano) of Nueva Vizcaya. Moreover, the concept of the study was drawn from the theories of Maslow’s Hierarchy of Needs, areas of personal finance, financial literacy identifiers and core competencies, top-down processing theory, and behavioral finance. In addition, the study used a descriptive-inferential research design, and data were analyzed using several statistical tools. The result of the study showed that public secondary teachers have a high level of financial literacy and financial perspectives. But this is in contrast to the level of financial practices, which yield a low result. Based on the result of the study, the researchers recommend a personal finance model for improving the level of financial literacy and the perspectives and practices of public secondary teachers.

An insight into financial literacy of University faculties: A case study of University of Rajasthan employees, India

Research on measurement of financial literacy and its implications have increased in recent years; however, being focused on vulnerable population sub-group the studies have ignored the better-off section. To attain a sustainable financial system, financial literacy must reach all including educated ones who can also be its provider. Teachers, being one such group can act as a channel between banks and students; however, it is imperative to quantify effect of education on financial literacy. Hence, the study based on primary data collected from employees of the University of Rajasthan, India aims at: measuring financial literacy and quantifying the effect of education. The results using Quantile regression estimates reveal positive effect of education on financial literacy declines with its improving score. It mandates the need for exclusive financial training programs to move from low to high level even for highly qualified teachers. Also, educated groups are not insulated from lack of financial literacy though they do have a basic understanding of financial concepts and hence can easily move up the ladder as well as pass on the information to their students. Considering the facilitator role of education, special programs oriented towards the better-off section particularly teachers should be designed. • The components of financial literacy that need specific attention irrespective of the work profile caters to modern financial instruments such as bonds, mutual funds. • The understanding of financial literacy is overshadowed by perceived notions. • Education is merely a facilitator of financial literacy which ceases to be influential for a high level of financial literacy. • University teachers should be provided with exclusive financial literacy training materials to develop a channel between the bank and potential labour force.

Financial (il)literacy vs. individual’s behavior

We explore the role that financial (il)literacy and personal traits have on financial behavior. Using a sample of 156 college students from the United States, we provide unique empirical evidence by specifically differen- tiating between individuals with higher levels of financial literacy versus individuals declaring not knowing the answers to financial literacy questions and those answering incorrectly. Thus, we assess the implications of revealed lack of financial knowledge on financial behavior regarding credit card use in comparison with two other cohorts; cohort one answering correctly, and cohort two failing to answer correctly. A novelty of our study is that we contrast these results to the behavioral factors of over spending and surprised levels of spend- ing—proxies for personality traits—when using credit card. Our exploratory empirical findings indicate that among personal-traits considered in this study overspending results in lack of payment in full in credit card debt, and more importantly these effects dominate any gains derived from financial literacy. To this extent fi- nancial literacy appears to only play a marginal role avoiding month-to-month credit card debt. Furthermore, financial knowledge derived from parents has a strong positive effect on individuals’ financial behavior espe- cially for students characterized by a relevant financial illiteracy. The implications of this research support the argumentation that early financial literacy may have the strongest effect in shaping individuals inherent behav- ior patterns; that is, early exposure to financial education is strictly preferred and should be promoted at early stages of the educational system.